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Show at B the amount of tax payable before the allowance of any rebates, tax offsets and credits.

The compliance status of the fund affects the tax rates that apply. If the fund is a regulated superannuation fund, ADF or PST and you have not received a Notice of non-compliance from APRA, then the fund is a complying fund and the standard tax rate is 15%. If your fund is a non-complying fund the standard tax rate is 45%.

However, different tax rates apply to the following types of income and you must ensure that you apply the correct rate of tax amounts shown at:

The examples below should help you to determine the gross tax calculation. There are special provisions for no-TFN-quoted contributions. Refer to R Assessable contributions in these instructions for examples.

If you show no income at R3, U and T, then the amount you show at B is the amount multiplied by the applicable tax rate. Otherwise use examples 5 and 6 to help you calculate the gross tax amount.

The Natalie Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.

The fund received $10,000 in assessable contributions (shown at R item 10), all of which are employer contributions. Of that amount, $8,000 is shown at R1 item 10 for members who quoted their TFN, but $2,000 is shown at R3 item 10 for members who have not quoted their TFN and whose account was opened either:

on or after 1 July 2007, or

prior to 1 July 2007 but the assessable contributions made for the member in the year exceeded $1,000.

The fund has also incurred $1,000 in administration expenses (J item 11). The superannuation fund's taxable income is $9,000.

The Elizabeth Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.

The fund received $10,000 of assessable contributions (R item 10), and $4,000 of private company dividends. All private company dividends are generally treated as non-arm's length income unless that income is consistent with an arm's length dealing - see U Net non-arm's length income for a definition of 'arm's length dealing'. Of the $4,000 private company dividends, $2,000 are treated as non-arm's length income. The net non-arm's length income is taxed at 45%.

Non-arm's length income expenses are $100. These expenses can be deducted only from the non-arm's length income. All non-arm's length income is shown on the tax return as a net amount of income.

The amount of taxable income remaining after taking into account the non-arm's length income is referred to as the low tax component.

The fund has also incurred $2,500 in administration expenses (shown at J item 11) that are not considered to be attributable to the earning of the non-arm's length income.

The superannuation fund's taxable income is $11,400.

Amount

Rate

Tax

Assessable income

Employer contributionsplus

$10,000

Net private company dividends (arm's length dealing)plus

$2,000

Net private company dividends (non-arm's length dealing)

$1,900

Total assessable incomeless

$13,900

Deductions

Administration expenses

$2,500

Taxable income

$11,400

Components of taxable income

Non-arm's length component

$1,900

45%

$855

Low tax component (that is other taxable income)

$9,500

15%

$1,425

Gross tax

$2,280

Example 6b: Non-complying superannuation fund

The income of non-complying superannuation funds is taxed at the rate of 45% (except for a tax rate of 46.5% which applies to no-TFN-quoted contributions).

If the Elizabeth Superannuation Fund was a non-complying fund, all of its income would be taxed at the same rate because it does not have no-TFN-quoted contributions. You would calculate its gross tax as follows:

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